Cybersecurity, talent management, ESG, data privacy among top business risks for 2022
In most companies, the risk management practices, although not sufficiently mature or optimized, prove that the risks that have arisen have been sufficiently well managed. The pandemic has given an important wake-up call to understand the wide variety of risks and uncertainties. Uncertainty is the new norm, and therefore risk management has become more critical to the success of a business.
For those involved in risk management, the pandemic has put them on notice to make risk assessments more accurate and more responsive to the changing risk environment. It is necessary to determine the most relevant risks to have a perspective on the best ways to manage them.
Each year, The IIA, ECIIA, Big-4 Audits and consulting firms release research reports based on surveys of key risks to illuminate the risk horizon and outlook for the year. future. One of the first questions to answer in risk management is: “What are our most critical risks?” The compilation of the main business risks for 2022 will preside over this prediction.
As in the past five years, cybersecurity tops almost every list of top risks for 2022. It reflects the constant struggle to keep up with the evolving and vexing nature of cyber risk. The growing sophistication and variety of cyberattacks often have disastrous financial impacts. Hackers love situations of extreme change where people are distracted, make fear-based decisions, and are error-prone. As the pandemic enters a new phase, it can be more chaotic and difficult. Cybersecurity risks continue to be a significant concern for any organization, regardless of size or industry.
Attracting and retaining cybersecurity specialists is a major challenge. Despite huge spending on cybersecurity over the years, problems persist. This risk examines whether organizations are sufficiently prepared to handle cyber threats that cause disruption and damage their reputation. It doesn’t look like cybersecurity will recede as a major risk anytime soon.
Talent management is identified as the second major risk. Finding, hiring and retaining top talent is expected to remain one of the biggest risks facing businesses in 2022. Finding top talent is challenging with the varying generational gaps in the workforce to match and mix experience and new knowledge.
The Robert Half survey found that nearly half of workers plan to look for a new job in 2022, with Gen Z the most likely to move. We hear about the Big Quit, also known as the Big Quit, an economic trend in which employees voluntarily quit en masse, meaning the talent market will be more competitive than ever. While work virtualization makes it easier to access global talent, it has its limits. It is up to companies to attract and retain people by evidently approving that their contributions are valued by paying well and prioritizing their well-being.
Environmental, social and governance topics, known collectively as ESG, and reporting on these matters are considered a material risk in 2022. ESG refers to the metrics used to assess how sustainability goals guide businesses. company performance. Sustainability includes organizational governance, social sustainability and environmental sustainability. Companies must anticipate emerging ESG requirements by understanding processes and controls and adopting sustainability frameworks.
ESG reporting is not yet mandatory, but its adoption is imminent. The stakes are too high, with pressure from regulators, investors, customers, third party affiliates and society. The benefits of doing it right outweigh the cost with increased business opportunities. The IIA’s On Risk 2022 study states: “This risk examines the ability of organizations to reliably measure, assess, and report on their environmental impacts.
One of the biggest risks businesses will face in 2022 is digital identity and data privacy risk: the risk of a data breach. It’s as close as “it’s not if you’ll be raped, it’s when.” Due to a demanding regulatory environment, companies must adequately protect sensitive data and comply with applicable laws and regulations. Legal exposure to personal rights and data privacy has given sensitivity to data protection. Taking a piecemeal approach to technology is no longer enough; companies need to build integrated systems.
Risk is often viewed as inherently negative, but a more nuanced view perceives equal opportunity for every risk. Nobody knows what 2022 will look like, but the missions to watch, modify and learn will be the most important.
Sundaresan Rajeswar is a board member of the Qatar Chapter of the Institute of Internal Auditors; he is also on the Advocacy Advisory Council for The IIA’s Global Board of Trustees for 2021-2023.